Does Tupperware’s Chapter 11 Bankruptcy Mark the End to the “Sales Party” Era?

By: Monique McClung*

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Tupperware is a brand name that has become eponymous with plastic storage containers.  Yet, last month, the company voluntarily initiated Chapter 11 Bankruptcy proceedings after facing mounting financial pressures.^[1] So, what happened?

In April 2023, Tupperware disclosed in an SEC Report that it was in danger of going out of business.^[2] The company disclosed that additional cash flow was necessary to continue its business operations.^[3] Four months later, Tupperware announced an agreement with lenders to restructure debt obligations.^[4] This agreement reduced $150 million in cash interest and $55 million in amortization payments.^[5] Tupperware sought to use this restructuring to improve their profitability and liquidity.^[6] However, these efforts proved unsuccessful.

 On September 17^th, 2024, Tupperware Brands Corporation (“Tupperware”) initiated voluntary Chapter 11 proceedings in Delaware District Court.^[7] The company seeks approval for a sale that could upgrade its digital presence and protect its well-known branding.^[8] Tupperware plans to continue operating during the proceedings, including paying wages and suppliers for ongoing services.^[9]

Tupperware’s lenders oppose this plan, stating a preference for foreclosure on Tupperware’s assets outside of bankruptcy.^[10] Three lenders, Alden Global Capital, Stonehill Institutional Partners, and Bank of America cut off Tupperware’s access to $7.4 million in their bank accounts.^[11] Additionally, the lenders filed a motion seeking a conversion to a Chapter 7 liquidation.^[12] Chapter 7 would allow the lenders to take control of the company quickly without searching for a third-party buyer.^[13]

Tupperware made history in the 1950s when it implemented its direct-to-consumer sales approach.^[14] Their products were sold primarily by women in their homes through events that became known as “Tupperware parties.”^[15] Tupperware parties allowed women to enter the workforce when they could not receive opportunities outside of the home.^[16] This direct sales approach proved extremely lucrative for many years.^[17] However, in recent years, Tupperware’s sales have seen a steady decline.^[18]

Tupperware did not sell its products with major online retailers such as Amazon or Target until 2022.^[19] Because of its late entry into the digital marketplace, ninety percent of Tupperware’s sales remained through their direct sales model in 2023.^[20] If the company  successfully finds a buyer through bankruptcy proceedings, the buyer’s largest hurdle will be  increasing their online sales front and shifting away from the direct sales model.^[21]

Tupperware is not the first major direct sales company to face bankruptcy. Earlier this year, Avon, the direct sales empire, filed for Chapter 11 bankruptcy.^[22] Similar to Tupperware, Avon’s sales were done primarily through independent representatives.^[23] While Avon’s bankruptcy was partially due to lawsuits regarding talc in their makeup products, their failure to adapt to a changing market also played a role.^[24] Avon’s attempts to enter the digital market proved unsuccessful, largely because it diluted their brand identity.^[25] If Tupperware successfully finds a buyer, they should be careful to protect their brand identity.

The bankruptcy of both Tupperware and Avon are indicative of a larger shift in consumer behavior. In today’s fast-paced society, consumers are less willing to meet with sales representatives when they can buy the same product online.^[26] Younger consumers have purchased online for most of their lives and are easily swayed by social media product endorsements.^[27] Additionally, consumers have gradually been turning away from plastics and instead turning to more eco-conscious alternatives.^[28] While there is still a demand for storage containers, Tupperware has failed to evolve its business model to meet consumer habits.^[29]

Tupperware will return to court later this month to request elongated access to their cash accounts during their bankruptcy proceedings.^[30] Only time will tell if Tupperware will be able to pivot into a more modern sales model, or if the former storage container empire will become a thing of the past. 

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* J.D. Candidate, Class of 2026, Sandra Day O’Connor College of Law at Arizona State University

[1] Wyatte Grantham-Philips & Haleluya Hadero, Tupperware Lifts the Lid on its Financial Problems with Bankruptcy Filing, AP News (Sept. 18, 2024, 5:41 PM) https://apnews.com/article/tupperware-bankruptcy-cooking-food-storage-party-0482859639d2f2260fbd6325529034e8.

[2] Jordan Valinsky, Tupperware Stock Plunges After Warning it Could go out of Business, CNN (Apr. 10, 2023, 3:25 PM) https://www.cnn.com/2023/04/10/investing/tupperware-trouble/index.html.

[3] Id.

[4] Tupperware Brands Announces Debt Restructuring, PR Newswire (Aug. 3, 2023), https://www.prnewswire.com/news-releases/tupperware-brands-announces-debt-restructuring-301893197.html.

[5] Id.

[6] Id.

[7] Tupperware Voluntarily Initiates Chapter 11 Processes, Tupperware Brands (Sept. 17, 2024), https://ir.tupperwarebrands.com/news-and-events/press-releases/2024/09-18-2024-043654053.

[8] Id.

[9] Id.

[10] Dietrich Knauth, Tupperware Lenders Oppose Company Proposed Bankruptcy Sale, Reuters (Sept. 19, 2024), https://www.reuters.com/legal/litigation/tupperware-lenders-oppose-companys-proposed-bankruptcy-sale-2024-09-19/,

[11] Id.

[12] Id.

[13] Id.

[14] Erin Blakemore, Tupperware Parties: Suburban Women’s Plastic Path to Empowerment, History (Sept. 19, 2024), https://www.history.com/news/tupperware-parties-brownie-wise.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Michael Grothaus, Why is Tupperware Bankrupt? Food Storage Brand’s Chapter 11 Filing Reveals How it Failed to Change with the Times, Fast Co. (Sept. 18, 2024), https://www.fastcompany.com/91192883/tupperware-brands-bankruptcy-filing-chapter-11-reason-why-direct-sales-fail.

[20] Id.

[21] Id.

[22] Kate Hardcastle, Ding Dong, Avon’s Calling: The Rise and Fall of the Original Side Hustle,Forbes (Aug. 15, 2024), https://www.forbes.com/sites/katehardcastle/2024/08/14/ding-dong-avons-calling-the-rise-and-fall-of-the-original-side-hustle/.

[23] Id.

[24] Id.

[25] Id.

[26] Kate Hardcastle, From Kitchen Icon to Cautionary Tale: Lifting the Lid on Tupperware’s Challenges, Forbes (Sept. 19, 2024), https://www.forbes.com/sites/katehardcastle/2024/09/19/from-kitchen-icon-to-cautionary-tale-lifting-the-lid-on-tupperwares-challenges/.

[27] Id.

[28] Id.

[29] Id.

[30] Dietrich Knauth, Tupperware Regains Access to Cash for Upcoming Payroll, Reuters (Sept. 25, 2024), https://www.reuters.com/legal/litigation/tupperware-regains-access-cash-upcoming-payroll-2024-09-25/.